Counterpoint Research is attending Global MBB Forum on 10th and 11th October 2023
Our Research Vice Presidents, Neil Shah and Peter Richardson will be attending the Global MBB Forum 2023 at Dubai, UAE. You can schedule a meeting with them to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.
When: 10th & 11th October 2023
Where: Dubai, UAE
About the event:
The 14th Global Mobile Broadband Forum, hosted by Huawei in cooperation with GSMA, GTI, and the SAMENA Telecommunications Council, this year will provide an exciting opportunity for players in the mobile and adjacent vertical ecosystems to explore 5G business success, promote ecosystem maturity, and accelerate 5.5G commercialization.
With a strong speaker lineup and innovative product launches, the mobile industry is meeting once again to explore how mobile broadband technology is shaping the future and continuing the transformation of people’s lives and industries.
Click here (or send us an email at firstname.lastname@example.org) to schedule a meeting with them.
Joining the US-led effort to restrict chipmaking equipment exports to China, Japan has put in place restrictions that are more draconian than that of the US and where the Japanese state has effectively taken control of the country’s semiconductor capital equipment market.
Japan is imposing export restrictions on 23 types of equipment used to make semiconductors. But instead of limiting the restrictions just to China, it has flipped the entire industry on its head.
Instead of being able to ship to anyone unless told not to, now the Japanese companies can’t ship to anyone unless they are allowed to.
This effectively gives the Japanese trade ministry life and death power over semiconductor equipment, which may prove to be detrimental to the local industry’s health in the long run.
Unlike the US Department of Commerce, where the presumption is denial of a license, it seems the Japanese Ministry of Trade will operate under the presumption of granting licenses.
Any other mode of operation would be highly detrimental to its own industry.
This represents a bigger step than what many analysts were expecting from Japan. It will really hinder China’s ability to manufacture chips at non-leading edge nodes below 20nm.
This was the weakness of the new measures announced by the US last October, as at 20nm-10nm, it is possible to build a fab using non-US equipment.
However, when you add Japan into the mix, this then becomes virtually impossible and there will be no point in buying machines from ASML, meaning that the combination of the US and Japan represents an effective embargo.
This means that China will now have to rely on domestically produced capital equipment which is going to be a real problem.
Although Huawei claims to be able to manufacture at 14nm, it did not say whether it could do so at volume with good yields which is what is required for Huawei to be able to use these chips economically in its products.
The net result is that Japan’s actions make the US actions far more effective and deal a blow to any workarounds that the Chinese may have found to build fabs without US equipment.
This reinforces the view that China is in real trouble when it comes to semiconductors, which will hamper and slow its rise as a technological superpower.
That being said, there will be a likely bounce in the Chinese economy in H2 2023, although the lack of action on stimulating the economy remains a cause for concern.
If it comes, the rising tide will lift all boats and especially the beleaguered technology sector.
Micron: A display of weakness
China’s review of Micron on “national security” grounds is a tit-for-tat retaliation that shows just how weak its hand is in the game of semiconductor brinksmanship.
The Cyberspace Administration of China (CAC) has said it would review Micron’s imports into China to ensure that using its products would not compromise the security of its information infrastructure.
It seems that this move has nothing to do with national security but is instead an attempt to damage US interests in China without compromising its own technological ambitions.
If China was really concerned about “national security”, it would be reviewing many other companies. But a blockade on the import of products from many of these companies would hurt China just as much as the US, if not more.
In the case of Micron, China can still buy the same products from South Korea or Japan with no ill effects on its development of technology.
This is precisely why Micron has been targeted. It is unlikely that other companies that export chips to China will be targeted as it would do more harm than good.
The move is also unlikely to give China much in the way of negotiating leverage and so this will prove to be an isolated incident that is pretty irrelevant to the overall technological and ideological struggle.
(This is a version of a blog that first appeared on Radio Free Mobile. All views expressed are Richard’s own.)
Huawei captured a massive 60% share of the 5G smartphone market.
Huawei reached its highest ever share in China capturing 46% of sales volumes.
Apple was the fastest-growing OEM (32% YoY) during the quarter.
New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – Jul 24th, 2020
Smartphone sales in China declined 17% YoY in Q2 2020, according to Counterpoint’s Market Pulse – Monthly Smartphone Sales Tracking service. However, the sales increased 9% QoQ indicating some signs of recovery. COVID-19 has been mostly contained in China but the demand for smartphones is yet to recover to pre-COVID levels.
Commenting on the overall Chinese smartphone market growth, Mengmeng Zhang, Research Analyst at Counterpoint Research, said, “Although China’s commercial activities have resumed since the pandemic has subsided, consumer confidence remains low. Both OEMs and Chinese operators are actively pushing 5G smartphones through lowering prices of 5G devices as well as 5G plans. This has increased the adoption of 5G, with one-third of the total smartphone sales during the quarter were 5G devices, the highest adoption in the world. However, this was still not able to offset the overall market decline.”
Exhibit 1: Smartphone Sales Volumes Share (%) of Key OEMs in China
Source: Monthly Smartphone Market Pulse, July 2020
Highlighting the fiercely competitive landscape, Flora Tang, Research Analyst at Counterpoint, said, “Huawei continues to be the best performer in the China market, grabbing 46% market share in the quarter. Huawei achieved 14% YoY growth despite the overall market slowdown. China has become the most important market for Huawei as its overseas shipments saw a sharp decline after it lost the ability to use GMS in its latest smartphones. Huawei’s hefty investment in expanding distribution networks both online and offline has paid off. Also, Huawei’s 5G portfolio grew quickly with the help of the high-end Mate 30 and P40 series, as well as mid-tier Nova 7 series.
In terms of growth, Apple was the fastest-growing key OEM during the quarter. Despite the market decline, Apple grew an impressive 32% YoY due to the continued popularity of the iPhone 11 series and price cuts. iPhone SE 2020 also quickly entered among the top 3 best-selling iPhones in Q2 2020. June was the best month in terms of smartphone sales so far this year after COVID-19 outbreak driven by surge in sales by Xiaomi (+42% MoM), Huawei (+11%) ”
Source: Monthly Smartphone Market Pulse, July 2020
Discussing the development of 5G smartphones in China, Ethan Qi, Senior Analystat Counterpoint, highlighted, “Despite a slowdown in the smartphone market in China, Chinese OEMs have picked up the pace in 5G developments that were hampered by COVID-19 disruptions in Q1 2020. In Q2, 33% of smartphones sold were 5G enabled compared to just 16% in Q1. The proportion was even higher in June, where more than 40% of smartphones sold were 5G capable. China’s 5G smartphone market is quite consolidated with HOVX grabbing 96% of the market. Huawei leads in 5G smartphone sales accounting for 60% of the market, followed by Vivo, OPPO, and Xiaomi. 5G smartphones in China are still priced in the mid-to-high price range of USD$400 and above, however, 5G smartphone prices are quickly moving towards lower-tier price bands. High-end 5G smartphones are predominantly from Huawei, while Huawei, OPPO, Xiaomi, and Vivo all have various offerings in the mid-tier.”
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